Geography, says study, can hinder upward mobility

Share via e-mail

ATLANTA — Stacey Calvin spends almost as much time commuting to her job — on a bus, two trains, and another bus — as she does working part time at a day care center. She knows exactly where to board the train and which stairwells to use at the stations so she has the best chance of getting to work on time in the morning and making it home to greet her three children after school.

Her four-hour round trip stems largely from the economic geography of Atlanta, one of America’s most affluent metropolitan areas yet also one of the most physically divided by income. The low-income neighborhoods often stretch for miles, with rows of houses and low-slung apartments, interrupted by the occasional strip mall, and lacking much in the way of good-paying jobs.

This geography appears to play a major role in making Atlanta one of the metropolitan areas where it is most difficult for lower-income households to rise into the middle class and beyond, according to a study that other researchers are calling the most detailed portrait yet of income mobility in the United States.

The study — based on millions of anonymous earnings records and being released this week by a team of top academic economists — is the first with enough data to compare upward mobility across metropolitan areas. These comparisons provide some of the most powerful evidence so far about the factors that seem to drive people’s chances of rising beyond the station of their birth, including education, family structure, and the economic layout of metropolitan areas.

Climbing the income ladder occurs less often in the Southeast and industrial Midwest, the data show, with the odds notably low in Atlanta; Charlotte, N.C.; Memphis; Raleigh, N.C.; Indianapolis; Cincinnati and Columbus, Ohio.

In contrast, some of the highest rates occur in the Northeast, Great Plains, and West, including in Boston, New York, Salt Lake City, Pittsburgh, Seattle, and large swaths of California and Minnesota.

“Where you grow up matters,” said Nathaniel Hendren, a Harvard University economist and one of the study’s authors. “There is tremendous variation across the US in the extent to which kids can rise out of poverty.”

That variation does not stem simply from the fact that some areas have higher average incomes: Upward mobility rates, Hendren added, often differ sharply in areas where average income is similar, like Atlanta and Seattle.

The gaps can be stark.

On average, fairly poor children in Seattle — those who grew up in the 25th percentile of the national income distribution — do as well financially when they grow up as middle-class children — those who grew up at the 50th percentile — from Atlanta.

Geography mattered much less for well-off children than for middle-class and poor children, according to the results. In an economic echo of Tolstoy’s line about happy families being alike, the chances that affluent children grow up to be affluent are broadly similar across metropolitan areas.

The team of researchers initially analyzed an enormous database of earnings records to study tax policy, hypothesizing that different local and state tax breaks might affect intergenerational mobility.

What they found surprised them, said Raj Chetty, one of the authors and the most recent winner of the John Bates Clark Medal, which the American Economic Association awards to the country’s best academic economist younger than 40.

The researchers concluded that larger tax credits for the poor and higher taxes on the affluent seemed to improve income mobility only slightly. The economists also found only modest or no correlation between mobility and the number of local colleges and their tuition rates or between mobility and the amount of extreme wealth in a region.

But the researchers identified four broad factors that appeared to affect income mobility, including the size and dispersion of the local middle class. All else being equal, upward mobility tended to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods.

Income mobility was also higher in areas with more two-parent households, better elementary schools and high schools, and more civic engagement, including membership in religious and community groups.

Regions with larger black populations had lower upward-mobility rates. But the researchers’ analysis suggested that this was not primarily because of their race. Both white and black residents of Atlanta have low upward mobility, for instance.

The authors emphasize that their data allowed them to identify only correlation, not causation.

Other economists said that future studies will be important for sorting through the patterns in this new data.